Poland rolls out big legal gun against Nord Stream 2

Poland, the EU country at the forefront of efforts to stop the Nord Stream 2 offshore pipeline project, announced on Wednesday (9 May) it launched legal proceedings against Gazprom and the five EU companies involved in the project, warning they risk fines of up to 10% of their annual turnover.

The Polish Office of Competition and Consumer Protection (UOKiK) has initiated proceedings against Russia’s Gazprom, Switzerland’s Engie and Austria’s OMV, as well as Uniper and Wintershall of Germany, the country where Russian gas will reach EU soil.

Poland has tried its best to convince European countries and EU institutions that the Gazprom-led project to build a second pipeline pumping Russian gas directly to Germany under the Baltic Sea undermines the bloc’s strategic interests and violates competition rules.

Poland wants the European Union to ban the construction of a second pipeline to pump Russian gas to Germany under the Baltic Sea, alleging it undermines the bloc’s strategic interests and violates competition rules.

In 2016, UOKiK decided that the planned concentration between Gazprom and the five EU companies could lead to a restriction of competition.

At that time, UOKiK said that Gazprom had a dominant position in gas supplies to Poland and the transaction could further strengthen the company’s negotiating power over Poland and Polish clients. The members of the consortium then withdrew their notification of concentration, which according to UOKIK was tantamount to halting their merger.

Marek Niechciał, the president of UOKiK stated that Gazprom and the five EU companies had nevertheless decided to finance Nord Stream 2, which in his view constitutes a violation of the Polish anti-monopoly law.

UOKiK said in a press statement that the anti-monopoly proceedings were initiated a few days ago.

In the opinion of the Polish authority, the activities of the would-be consortium members could be an obvious attempt to circumvent the lack of consent to establish a company financing the construction of the gas pipeline.

Given the controversial nature of the project, reports suggest that banks are reluctant to engage in financing Nord Stream 2, as they lack clarity, including about US sanctions against Russia.

UOKiK said it can impose a fine amounting to maximum 10% of a company’s turnover if the company performed a concentration without obtaining prior consent.

In addition, where the concentration has already been implemented and restoration of market competition is otherwise impossible, the president may order the disposal of the entirety or a portion of the undertaking’s assets, the disposal of stocks or shares ensuring control over the undertaking, or the dissolution of the company over which the undertakings have joint control.